Yangcheng Shanda Yuanfeng Equity Inv. P'ship v. Wan
Yangcheng Shanda Yuanfeng Equity Inv. P'ship v. Wan
2021 WL 9526888 (C.D. Ill. 2021)
June 29, 2021
Long, Eric I., United States Magistrate Judge
Summary
The court granted Plaintiff's Motion to Compel documents in Discovery Request 3 and Document Request 4, and ordered Kevin Wan to respond to Plaintiff's Discovery Request 8. These requests involve ESI, which is important to the case as it could provide evidence of Kevin Wan's knowledge of the Chinese Action. The court has ordered Kevin Wan to produce the requested documents, and it is up to the parties to ensure that the ESI is properly handled and preserved.
YANGCHENG SHANDA YUANFENG EQUITY INVESTMENT PARTNERSHIP, a limited Partnership and Citizen of China, Plaintiff,
v.
KEVIN WAN, an Illinois Citizen, Defendant
v.
KEVIN WAN, an Illinois Citizen, Defendant
Case No. 20-2198
United States District Court, C.D. Illinois
June 29, 2021
Long, Eric I., United States Magistrate Judge
ORDER
*1 This matter is before the Court on Plaintiff's Motion to Compel (#16) Defendant, Kevin Wan, to produce documents. Kevin Wan filed a Response (#19) in opposition to the Motion to Compel. For the reasons explained below Plaintiff's Motion (#16) is granted in part and denied in part.
I. Factual Background
On May 20, 2019, Plaintiff sued Defendant Kevin Wan, Kevin's brother Keija Wan, and Zmodo Technology Shenzhen Corporation (“Zmodo”) in the People's Republic of China (“China”) for breach of contract. (Plaintiff Br. #17, p. 2). Specifically, Plaintiff alleges it purchased $13,242,465 worth of shares of Zmodo, and Kevin Wan agreed to repurchase these shares at the purchase price, plus interest at an annual rate of 12%.[1] (Amended Complaint #3, p. 3). However, Kevin Wan allegedly failed to repurchase the shares as specified in various contracts, and Plaintiff filed a lawsuit in China (“China Action”) against Kevin Wan, Keija Wan, and Zmodo in response.
In the China Action, Keija Wan, appeared in the lawsuit and was represented by a local attorney. (Amended Complaint #3, p. 4). Kevin Wan was summoned by the Chinese Court to appear, but he failed to appear. (Amended Complaint #3, p. 4). The Chinese Court deemed Kevin Wan's failure to appear as a waiver of his right to respond. (Amended Complaint #3, p. 4). The Chinese Court concluded: (1) Keija Wan and Kevin Wan resided in the Financial Technology Building in Shenzhen City, China; (2) Kevin Wan was liable for a money judgment of $13,242,465 (i.e. RMB 92,665,478) from March 22, 2017, to December 30, 2018, plus interest and other costs; and (3) Keija Wan was jointly and severally liable for this money judgment. (Amended Complaint #3, p. 5-6). The defendants in the Chinese Action had thirty days to appeal the judgment, but they did not appeal the judgment.[2] (Amended Complaint #3, p. 5). On April 23, 2020, the Chinese Court executed a money judgment against the defendants for $18,708,468.74 (RMB 130,914,389).[3] (Amended Complaint #3, p. 5-6).
On July 13, 2020, Plaintiff filed a Complaint in this Court to enforce the judgment pursuant to the Illinois Uniform Foreign-Country Money Judgments Recognition Act (“UFMJR Act”). 735 ILCS 5/12-661. In response, Kevin Wan filed a Motion to Dismiss and argued the Chinese Judgment was not enforceable because he was never served in the Chinese Action.[4] (Defendant's Motion to Dismiss #8, p. 1-3). Additionally, Kevin Wan argued the first time he heard of the Chinese Action was when he was served with process for the case at bar. (Plaintiff Br. #17, p. 3); (Ex. #9-1, p. 2); (Plaintiff's Interrogatories #17-1, p. 6).
*2 The Court denied Kevin Wan's Motion to Dismiss Plaintiff's claim for lack of notice of the Chinese Action and noted that: “The court finds this is a fact-intensive inquiry that will be better suited for summary judgment than a motion to dismiss under Rule 12(b)(6).” (Court Order #13, p. 10). Plaintiff issued document requests probing whether Kevin Wan lacked notice of the Chinese Action until he was served with process for the instant action, as he had previously argued.
II. Legal Standard
A district court is in the best position to decide the proper scope of discovery and to settle any discovery disputes. Searls v. Glasser, 64 F.3d 1061, 1068 (7th Cir. 1995). Rule 34 provides that a party may request, “any designated tangible things” or “electronically stored information” that are in the custody or control of another party. Fed. R. Civ. P. 34(a)(1)(A)-(B). Rule 26(b) defines the scope of discovery:
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.
Fed. R. Civ. P. 26(b)(1). “[A] party may move for an order compelling disclosure or discovery.” Fed. R. Civ. P. 37(a)(1). “The burden rests upon the objecting party to show why a particular discovery request is improper.” Hill v. City of Chicago, 2011 WL 320204, at *1 (N.D. Ill. Jan. 31, 2011) (citations omitted). The district court exercises significant discretion in ruling on a motion to compel. Gile v. United Airlines, 95 F.3d 492, 495-96 (7th Cir. 1996). It may grant or deny the motion in whole or in part. Id.
III. Analysis
Plaintiff issued document requests relating to the assertion that Kevin Wan first learned of the Chinese Action when he was served with process for the instant lawsuit. Kevin Wan objected to Discovery Requests 3, 4, and 8 because, according to Kevin Wan, these documents are not relevant, disproportional to the needs of the case, and not likely to lead to the discovery of relevant information. Plaintiff filed the instant Motion to Compel in response.
For Discovery Request 3, Plaintiff demanded that Kevin Wan produce:
All documents and communications, including but not limited to emails, cellular phone records, text messages, between Defendant and Keija Wan concerning in any way the dispute between Kevin Wan, Kaija Wan, or [Zmodo] and [Plaintiff]; the lawsuit filed in China by [Plaintiff] against the same; and the judgments entered [in China].
(Plaintiff's Br. #17, p. 5). Kevin Wan argues the request is overbroad because: (1) Plaintiff did not provide a temporal limitation to the discovery request; (2) the term “dispute” is undefined and could pertain to numerous business transactions between the parties; and (3) Plaintiff's request is overbroad because it requests documents that pertain to the dispute between Kevin Wan and Plaintiff instead of Kevin Wan's knowledge of the lawsuit.
The Court grants Plaintiff's Motion to Compel the documents in Discovery Request 3. This request will likely lead to discoverable information that is relevant to Plaintiff's claims and is proportional to the needs of the case. The Discovery Request is limited by communications between Kevin Wan and his brother about the dispute and lawsuit with Plaintiff. Moreover, the term “dispute” clearly refers to the parties' dispute regarding the share-repurchase agreements, and Kevin Wan's argument to the contrary is not persuasive. (Defendant Br. #19, p. 3).
*3 Kevin Wan also argues the request is overbroad because Discovery Request 3 demands all communications pertaining to the dispute between the parties instead of documents pertaining to Kevin Wan's knowledge of the Chinese Action. The Court disagrees. Kevin Wan asserted in his Answer and Motion to Dismiss that the Court should not recognize the Chinese Judgment because, in part, China does not have impartial tribunals. (Defendant's Motion to Dismiss #8, p. 2); (Order on Motion to Dismiss #13, p. 21); (Answer #14, p. 8-9). In other words, Kevin Wan put the facts about the share-repurchase agreements at issue in his filings with this Court. Additionally, Kevin Wan could challenge the merits of the Chinese Action at the summary judgment stage of the proceedings. Therefore, the Court grants Plaintiff's Motion to Compel the documents as specified in Discovery Request 3.
For Document Request 4, Plaintiff demanded:
All documents and communications, including but not limited to emails, cellular phone records, text messages, between Defendant and any representatives or employees of [Zmodo] concerning in any way the dispute between Kevin Wan, Keija Wan or [Zmodo] and [Plaintiff]; the lawsuit filed in China by [Plaintiff] against the same; and the judgments entered [in China].
(Plaintiff's Br. #17, p. 6). Kevin Wan argues this request is overbroad because: Plaintiff did not designate a custodian or limit the scope of employees for the information and it would be burdensome for Kevin Wan to search for all communications between himself and all representatives and employees of Zmodo.
The Court grants Plaintiff's Document Request 4 but limits the scope of the documents to non-privileged communications. These documents are relevant to Plaintiff's claims and the defenses that Kevin Wan has asserted. Moreover, Kevin Wan failed to meet his burden in establishing that producing these documents would be an undue burden. Hill v. City of Chicago, 2011 WL 320204, at *1 (N.D. Ill. Jan. 31, 2011) (citations omitted). (“The burden rests upon the objecting party to show why a particular discovery request is improper.”). Kevin Wan did not explain the number of employees with whom he communicated regarding this controversy, probably because such a statement would undermine his claim that he had no knowledge of the lawsuit. Additionally, the Court does not believe that Kevin Wan would discuss this dispute with many employees or representatives of Zmodo, which should naturally limit the scope of the search. Accordingly, the Court grants Plaintiff's Motion to Compel and orders Kevin Wan to produce non-privileged documents as specified in Document Request 4.
For document request 8, Plaintiff demands Kevin Wan produce: “Documents sufficient to demonstrate that [Zmodo] is headquartered in [sic] Shenzen, China.” (Plaintiff Br. #17, p. 6). Plaintiff argues that this request is relevant to Kevin Wan's defense that he was not properly served in the Chinese action. (Plaintiff Br. #17, p. 6). This discovery request is relevant because Kevin Wan was the CEO of Zmodo, and if Zmodo was properly served in the Chinese Action, then it provides some evidence that Kevin Wan had actual notice of the Chinese Action. The Court orders Kevin Wan to respond to Plaintiff's discovery request 8 to the extent he has any responsive records in his custody or control.
IV. Conclusion
For the reasons provided above, the Plaintiff's Motion to Compel (#16) is GRANTED IN PART and DENIED IN PART. The Court orders Kevin Wan to produce the requested documents as specified in Section III of this order.
ENTERED this 29th day of June, 2021.
Footnotes
Kevin Wan is the founder and CEO of Zmodo. (Interrogatories, #17-1, p. 4).
Plaintiff attached an English translation of the Chinese Court's legal opinion to its Complaint. (Chinese Court Opinion #1-2, p. 19-31).
The Court notes the Chinese Court entered judgment in Chinese Yuan, and the undersigned included the value of Chinese Yuan in dollars as of July 13, 2020. See (Amended Complaint #3, p. 3, 5-6).
Under the UFMJR Act, Courts “need not recognize a foreign-country judgment if: (1) the defendant in the proceeding in the foreign court did not receive notice of the proceeding in sufficient time to enable the defendant to defend[.]”735 Ill. Comp. Stat. 5/12-664(c).